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1、Chapter 11Customer Service, Logisticsand DistributionLogistics and Physical Distribution Customer ServiceThe transporting and storing of goods to match target customers needs with the organisations marketing mixBoth within individual organisations and along a channel of distributionCustomers think o

2、f physical distribution in terms of the customer service levelhow rapidly and dependably a company can deliver what the customer wantsThere are trade-offs among physical distribution costs, customer service levels and salesTrade-offs Among Physical Distribution Costs, Customer Service Level, and Sal

3、esTotal cost ofphysical distributionInventory costLost salesTransporting costCustomer Service Level(% of customers served within some time periodsay 4 days)090%0Cost ($)Coordination of Physical Distribution ActivitiesAll transporting storing and product-handling activities of an organisation and a c

4、hannel system should be coordinated as one system to:minimise the costs of distributionfor a given customer service levelSimply focusing on individual costs may increase total costssince a total system is involvedRequires that the manager decide what aspects of service are most important to customer

5、sExamples: order delivery time, availability of products, order status informationExamples of Factors that Affect Physical Distribution Service Level (A)Advance information on product availabilityTime to enter and process ordersBackorder proceduresWhere inventory is storedAccuracy in filling ordersD

6、amage in shipping, storing and handlingOrder status informationExamples of Factors that Affect Physical Distribution Service Level (B)Advance information on delaysTime needed to deliver an orderReliability in meeting delivery dateComplying with customers instructionsDefect-free deliveriesHow needed

7、adjustments are handledProcedures for handing returnsThe Chain of SupplyThe complete set of organisations, facilities and logistic activities involved in procuring materials, transforming them into intermediate and finished products and distributing them Just-in-time deliveryreliably getting product

8、s there just before the customer needs themrequires close coordination and information flowsreduces handling costsreduces storing costsshifts greater responsibility to the suppliera small problem can cause big effectsElectronic data interchange (EDI) puts information in a standardised format easily

9、shared between different computer systemsTransportingMarketing function of moving goodsHelps facilitate economies of scale in producing goodsproduce in large quantities where it is inexpensive to produce, and then ship products to customersChoice of transportation affects customer satisfaction in te

10、rms of:pricing of producton-time delivery performancecondition of goods on deliveryChoice ofTransportation ModesFive major modes of transportation:RailTruck (road)WaterAirPipelineChoice of transportation mode depends on:CostDelivery speedNumber of locations servedAbility to handle a variety of goods

11、Frequency of scheduled shipmentsDependability in meeting schedulesThe Storing FunctionThe marketing function of holding goods to provide time utilityInventory is the amount of goods being storedGoods are stored at a costExamples of Storing CostsWarehouse expenseCapital needed to pay for inventoryProduct damageLosses due to theftObsolescenceSpecialised StorageDistribution CentreSpecial kind of warehouse designed

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